THE SOCIETY FOR DIVERSITY v. DTUI.COM LLC

CourtDistrict Court, S.D. Indiana
DecidedJuly 22, 2020
Docket1:19-cv-04589
StatusUnknown

This text of THE SOCIETY FOR DIVERSITY v. DTUI.COM LLC (THE SOCIETY FOR DIVERSITY v. DTUI.COM LLC) is published on Counsel Stack Legal Research, covering District Court, S.D. Indiana primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
THE SOCIETY FOR DIVERSITY v. DTUI.COM LLC, (S.D. Ind. 2020).

Opinion

UNITED STATES DISTRICT COURT SOUTHERN DISTRICT OF INDIANA INDIANAPOLIS DIVISION

THE SOCIETY FOR DIVERSITY, ) ) Plaintiff, ) ) v. ) Case No. 1:19-cv-04589-TWP-MPB ) DTUI.COM, LLC, and BILLY VAUGHN, ) ) Defendants. )

ORDER GRANTING DEFENDANTS' MOTION TO DISMISS

This matter is before the Court on Defendants DTUI.com, LLC's (“DTUI”) and Billy Vaughn's (“Vaughn”) (collectively, “Defendants”) Motion to Dismiss for lack of jurisdiction pursuant to Federal Rule of Civil Procedure 12(b)(2) (Filing No. 15). Plaintiff The Society for Diversity, Inc. (“SFD”) initiated this action alleging trademark infringement and other Lanham Act violations and state law claims. (Filing No. 1.) SFD seeks an injunction against the Defendants and monetary damages it suffered due to alleged improper use of its trademarks. Defendants contend that all of the activities complained of occurred through the operation of Defendants’ websites, and these de minimis contacts through the operation of a website are insufficient to confer personal jurisdiction. For the reasons stated below, the Motion to Dismiss is granted. I. BACKGROUND The following facts are not necessarily objectively true, but as required with a Rule 12(b)(2) motion, the court accepts as true the well-pleaded factual allegations and draws all reasonable inferences in favor of the non-movant. Matlin v. Spin Master Corp., 921 F.3d 701, 705 (7th Cir. 2019). The following is not the entirety of the facts alleged in the Complaint, but only those relevant to the motion before the court. SFD, an Indiana corporation with its principal place of business in Indianapolis, provides professional qualification credentials to companies who are responsible for educating employees

about diversity in the workplace. (Filing No. 1 at 1-3.) DTUI is a limited liability company organized under the laws of the State of Nevada. Vaughn, the managing member of DTUI, is a resident of and domiciled in the State of California. (Filing No. 16 at 2; Filing No. 16-1.) SFD and DTUI are competitors in the business of providing diversity training to government and businesses. (Filing No. 25-3 at 1 ¶3.) SFD owns registered trademarks for the terms CDP (Certified Diversity Professional), and CDE, (Certified Diversity Executive). Id. It confers CDP and CDE designations to persons that pass its rigorous tests and peer-evaluation of their work product. Id. SFD’s designations are recognized by businesses and governments throughout the world as proof that a person is competent in the field of diversity and inclusion. Id. A CDP or CDE designation expires unless it is renewed following additional testing.

The Defendants also provide services in the diversity education market, and they began advertising that their educational services would allow students to use the CDP and CDE designations owned by SFD. SFD had not authorized the Defendants to confer CDP or CDE designations on the Defendants’ students. (Filing No. 1. at 2.) The Defendants also distributed goods comprising training materials bearing the marks CDP and CDE. (Id. at 5.) SFD filed the instant Complaint for Trademark Infringement and Related Claims on November 18, 2019, alleging the Defendants advertise and sell products and services that infringe its trademark rights amounting to false and misleading representations in violation of the Trademark Act, trademark infringement under California and Indiana state laws, and unfair competition under Indiana common law and under the Lanham Act, 15 U.S.C. § 1051 et seq. and related state common law. (Filing No. 1.) SFD alleges the Defendants’ infringing conduct is willful and seeks enhanced damages and attorneys’ fees due to the exceptional nature of the case. In its Complaint, SFD contends:

This Court may exercise personal jurisdiction over the Defendants because of their systematic contacts with and purposeful availment of this forum. Specifically and without limitation, Defendants sell, offer for sale and market the subject infringing goods and services in this judicial district directly through the Internet, including websites such as https://dtui.com/ and https://diversityexecutiveacademy.com.

(Filing No. 1. at 3.) The Defendants subsequently filed a Motion to Dismiss on January 21, 2020 pursuant to Fed. R. Civ. P. 12(b)(2) contending this Court lacks personal jurisdiction over both DTUI.com, LLC and Billy Vaughn. (Filing No. 15.) II. LEGAL STANDARD Federal Rule of Civil Procedure 12(b)(2) requires dismissal of a claim where personal jurisdiction is lacking. After a defendant moves to dismiss under Rule 12(b)(2), “the plaintiff bears the burden of demonstrating the existence of jurisdiction.” Purdue Research Found. v. Sanofi– Synthelabo, S.A., 338 F.3d 773, 782 (7th Cir. 2003). The extent of plaintiff's burden is dependent upon the method in which the court determines the issue of personal jurisdiction. Id. “When the … court holds an evidentiary hearing to determine [personal] jurisdiction, the plaintiff must establish [personal] jurisdiction by a preponderance of the evidence.” Id. But where, as here, the court determines personal jurisdiction based only on reference to submissions of written materials, the plaintiff simply needs to make a prima facie case of personal jurisdiction. GCIU–Employer Ret. Fund v. Goldfarb Corp., 565 F.3d 1018, 1023 (7th Cir. 2009). In determining whether the plaintiff has met the prima facie standard, the court may consider affidavits and all other documentary evidence that have been filed, and any conflicts must be resolved in favor of the plaintiff as the non-moving party. Purdue Research, 338 F.3d at 782. III. DISCUSSION The Lanham Act, 15 U.S.C. § 1051 et seq., under which SFD presents its federal claims,

does not have a special rule for personal jurisdiction. Advanced Tactical Ordnance Sys., LLC v. Real Action Paintball, Inc., 751 F.3d 796, 800 (7th Cir. 2014). Since SFD brings claims under the Lanham Act, a federal district court has personal jurisdiction over a non-resident defendant if a court of the state in which it sits would have such jurisdiction. Purdue Research, 338 F.3d at 779. The court engages in a two-step analysis to determine personal jurisdiction over a non-resident defendant. “First, the court must determine whether its exercise of jurisdiction over the defendant comports with the forum’s long-arm statute. Assuming the first step is satisfied, the court must then determine whether this exercise is authorized by the Due Process Clause of the Constitution.” Bell v. Halcyon Bus. Publications, Inc., No. 1:17-cv-04418-SEB-MJD, 2018 WL 2364091, at *2 (S.D. Ind. May 24, 2018). Indiana Trial Rule 4.4(a) serves as Indiana’s long-arm statute, which

expands personal jurisdiction to the fullest extent permitted by the Due Process Clause of the Constitution.

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Bluebook (online)
THE SOCIETY FOR DIVERSITY v. DTUI.COM LLC, Counsel Stack Legal Research, https://law.counselstack.com/opinion/the-society-for-diversity-v-dtuicom-llc-insd-2020.